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Saturday, March 31, 2012

Lunch is a nice meal and a free lunch is even nicer. The problem with free lunches is that someone always has to pay for them. Lunches don't grow on trees, unless they're fresh fruit, the ingredients have to be gathered, processed, shipped, mixed, prepared, packaged, shipped again and put on your plate by a waiter working in an establishment that has to pay rent, heating, electricity and salaries.

A free lunch isn't just free food, it's the entire human and mechanical infrastructure needed to get it ready and subsidizing a free lunch means paying for that entire infrastructure. That's one reason why some states and cities are slipping into bankruptcy like a man who has had too many martinis over lunch. It's not just the free lunch that's expensive, it's the often inflated cost of the lunch delivery system that is killing everything.

The free lunch began as the Bread and Circuses which had its roots in a Roman bread dole. Free or subsidized bread is still a feature of political life in many parts of the world, including Egypt where the revolution had more to do with the price of bread than with democracy. The Muslim Brotherhood offered voters food giveways, turning Bread and Circuses into Bread and Beheadings, which is also a circus of sorts.

Free Egyptian bread started out as American subsidized aid. The world's free lunch is still doled out in Washington D.C. where the Senate dining rooms had to be privatized after losing 18 million dollars. A government that can't even run a cafeteria without losing millions of dollars can't run anything else without losing billions or trillions doing it.

The logic of free bread is simple enough. It says that the people in power are stealing so much money that it's worth it to kick a small piece of it back as subsidized food to avoid the people booting them out. That's usually the way it is when people offer you free lunches bought with your own money, it's because they're stealing a hundred times the amount so they can afford to cover your lunch with some of the money they already stole from you.

That may be where the free lunch starts out, but that's not where it ends. The popularity of free lunches makes the free lunch program politically untouchable, and that means it's going to be rolled, stuffed and robbed forty times over. It means that whenever anyone wants to steal money, they'll pass it through the Free Lunch program.

Whenever legislators complain that some vital program which people care about can't be covered without a tax hike, invariably the reason that there's no money is because the money that should have gone to the program was stolen. It wasn't broken into in the middle of the night, the same legislators getting self-righteous about social security or the fire department or a dozen other things redirected the money to their own pet projects. They did that knowing that when the money ran out, the key programs could be used to justify more tax hikes.

The free lunch may start out free, but it ends up costing many times the market value of an ordinary lunch. Even the free lunch program itself is rarely about giving out free lunches, it's about building up a program that gives out free lunches, which is not the same thing at all.

The first goal of government programs is to exist. Their second goal, hopefully, is to carry out their stated mission. Usually it's more like the fifth or sixth goal, with the second goal being to give the right people jobs administering the program, the third goal being to promote the success of the program and the fourth goal being to lobby for an expansion of the program.

A restaurant has to manufacture and distribute its lunch efficiently in relation to the amount that it can charge the customer for the lunch. But a free lunch program isn't bound by such a narrow target. The only limitation on the free lunch program is how much money it receives to fund the program. When you are in a free lunch program, then you don't get to dictate the cost of the lunch or the content of the lunch. The funders of the program do that and their goal is to run the most inefficient program possible because it's how they pull in the most money.

Free market programs aim for the tightest budget possible. Government programs aim for the widest budget possible. Free market programs aim to provide a service. Government programs service themselves by tackling unsolvable social problems and making them even more unsolvable program. A restaurant tries to feed people, a free lunch program feeds itself while cultivating an air of moral superiority.

None of this changes the basic economics of the situation. Lunches still have to come from somewhere. They still have to be harvested, picked, prepared, shipped and distributed. In a perfect world it should be possible to give everyone a free lunch, in the real world it isn't. After the usual grandstanding tics about making the rich pay more have passed, the program gets streamlined by lowering the quality of the lunch. And so the free lunch is not only much more expensive, it's also much worse.

The laws of economics squeeze free lunches even harder. When the free lunch is healthcare, then once the politicians have signed the bill, slapped each other on the shoulder and posed in commercials where multiracial families smile to show how happy they are, the people who really make the sausage and pull down six figure salaries meet at conferences in Tahiti or Basel to figure out which end to squeeze first. They calculate the cost of patients in the last months of their lives and begin punching the euthanasia button on their calculators. They start looking at how many expensive drugs can be eliminated as too experimental and how many people can be forced into lifestyle programs in the hopes that their health care won't cost as much twenty years down the road.

That's what free lunch really looks like and it has as much relation to what politicians sell a free lunch as being, as the commercial for a new wonder drug has to its real life side effects. The side effects of a free lunch are that you pay much more for the free lunch, the free lunch is much less nutritious and justifies the free lunch distributors dramatically curtailing your freedom and your life.

Magical thinking says that we can have something if we really want it enough. That's true to an extent, but we can't have it for free. Everything has positive and negative side effects. The medicine that cures a deadly disease kills a percentage of its patients. That's the difference between science and magic.

Economists who pretend that money comes from government programs are engaging in magical thinking. They are the voodoo economists who wave their sticks, bones and slide rules over the heads of eager politicians and promise them that everything will be fine so long as they pass the bill under a favorable fiscal moon.

Magical economics recognizes no limitations. It says that if a free lunch is moral, then it is also economically feasible and deliverable. Clever magicians can drag out a trick for a long time, but when the show is done, coins don't come out of ears, assistants can't be sawed in half and something doesn't come from nothing. And government is one big nothing. It is a way to spend wealth, not create it.

When the curtain falls, then the people behind the scene have to figure out how to sell the illusion and prevent the audience from seeing the blood dripping from the box. Because magic isn't real. Economics for the most part is. If you saw someone in half, they will bleed, unless you fool the audience by moving them into a single box and if you pull a coin out of an ear, it has to be the same coin that was in your hand all along.

Politicians like to believe in magic and free lunches because it makes them feel superhuman. And people like to believe in free lunches, because free lunches are nice to have. But in between the people and the politicians are the blueprints for a free lunch program which run 2,700 pages and contain not only the details of how the sausage will get made, but also where else all that money will go.

The free lunch is a cornucopia, a compelling magical idea over the prosaic reality that a government which has stolen so much that it's giving away free lunches, will steal so much that it will not be able to afford the free lunches either. Because the magician is really a pickpocket, a card shark and a con artist. His only real trick is making his audience believe in magic, even though they know better. The trick keeps them from noticing his hand in their pocket, not because they can't see it, but because they don't want to.

Utopia is a wonderful magic trick. A land where everyone is equal, everyone has enough and no one has anything to complain about. It's such a wonderful con that even many of the con artists believe that the land of free lunches is real. It isn't though.

At the end of the road Utopia is Greece after the money ran out. It's Rhode Island and California. It's patients dying under NHS' watch and six figure salaried medical ethics experts discussing which patients to kill. It's the Mandate and the SWAT team and a thousand bureaucrats and police enforcing a million rules. It's bills with too many pages to read and governments too big to fail until they do. It's the rabbit hole that Alice falls into that takes her into a Wonderland that's half dream and half nightmare.

That is Utopia's free lunch, a magic dance through the air, arm in arm with Wile E Coyote that ends when we realize there's nothing underneath us and someone has stolen our shoes. It's the magic of idealism mingled with corruption, dissonant musical instruments playing a mad waltz that ends with everyone falling down. A reminder that we can make a better world, but not by closing our eyes and believing in free lunches and fairies.

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comments:

Nice story once again Sultan, but normal economies are illusions just as well. Only primitive agricultural economy was real as it served it's members to survive one more day and those involved would be more or less selfsupporting but note how quickly even that society created a top power layer demanding to be fed through an intricate system of armed intimidation and alleged intellectual elitism without doing the hard work.

Another excellent post. There is only one justification for obamacare, and it is that too many people don't pay for their care now. I work in a county hospital and a good percent of those I treat come from overseas and leave as soon as they become well. They show up for their expensive drugs and once the pharmacy provides them with a several months supply, because that's what the hospital pharmacy does when they do not have insurance, they fly off to some island, or to Pakistan, or to Bangladesh. Some provide fake information because they are here illegally, while others simply have no insurance and don't want to pay for their care. I see families drop off their elderly parents and leave for a weekend because they want a vacation from them, and we cannot contact them when we realize that there is no acute medical problem that this elderly person faces and they simply need some assisted living. Other families refuse to put their elderly parents in a nursing home, because they want to use their social security checks for themselves and we go through a protracted legal battle with these families. This was the problem that obamacare was supposed to address, but it won't. The illegal aliens and freeloading medical tourists will not pay into this system. The families that abuse our generosity, will find other ways of abusing them. And the solution that obamacare came up with is just another delusional pipe dream based in the land of political correctness.